Ab tera kya hoga Madan Mohan? [The "Office for Profit" wallah dude]

I love Indian politicians and have good reasons for doing so. After all they have always come to my aid, even in my lowest hour, by providing me with a few moments of unadulterated mirth.

Take for instance the Congress gambit of getting Jaya Bachchan evicted from the Rajya Sabha. It went like clockwork with the poor lady turfed out by the President for holding an office of profit. So far so good. Then suddenly a pesky someone realised that, hey! The Queen Bee (Madam Sonia Gandhiji, please do I have to spell out everything?) herself occupies an office of profit.

And as it turns out the whole episode returned to bite the Congress in its collective ass.

Of course, Sonia Gandhi is attempting to emerge as the one who sacrificed her post for the sake of propriety in public life but this time it might not wash. Hopefully.

Meanwhile on the Left flank:

The Left parties are traditionally the ones who go on and on about morality in public life. But suddenly they find that they cannot do much this time. And why is that? Oooo well! 10 of their own MPs apparently also hold an office of profit. This list includes the much respected Mr. Somnath Chatterjee, who just happens to be the Speaker of the Lok Sabha. So, to hell with all this morality shorality business, none of them will resign.

Fair enough. But if they think Didi (Mamta Bannerjee) is going to let them off the hook they are sadly mistaken. I am sure Didi is going to go after them in her shrill Bonglish till the time she heads into the assembly elections. If I was a Left party MP I would probably resign just to keep her quite.

However what hurts me, really really hurts me, is that no one is talking about dear Mr. Madan Mohan, the dude who started it all. If the Congress is to be believed then the complaint against Jaya Bachchan was filed by Madan Mohan in his individual capacity. If that really is the truth I wonder how he must be feeling right now. He must have become a virtual pariah in his own party. Tch tch.

Ab tera kya hoga Madan Mohan?

Bhagat Singh

Remember Bhagat Singh? He, along with Raj Guru and Sukh Dev, was executed by the British on March 23rd 1931 for his role in the Lahore Conspiracy case. Bhagat Singh played a small but spectacular role in our freedom movement. Such was his charisma that most of the young freedom fighters of his time looked upon him as a source of inspiration.

Bhagat Singh, however, did not win the Mahatma’s approval because of the violent methods that he employed. The annual session of the Congress was held at Karachi a mere six days after his execution. In spite of that both the Mahatma and the Congress were not too keen on supporting a resolution taken up by the revolutionaries.

As a compromise a few lines were added to the resolution which was then grudgingly passed. The resolution read, “The Congress while dissociating itself from and disapproving of political violence in any shape or form, places on record its admiration of the bravery and sacrifice……..”

A lot of the revolutionary youth believed that the Mahatma had not done enough to save Bhagat Singh and they welcomed Mahatma Gandhi with black flowers and garlands when he arrived in Karachi for the Congress session.

Given that today is the 75th anniversary of his execution, I thought, there would be some commemorative activity undertaken by the Central government. But so far I have not heard of any. I hope to god I am wrong and that there are, even as I key this in, activities underway which commemorate him. Seems unlikely though. His contribution to the freedom struggle has by and large been ignored by us all.

The only time we remembered Bhagat Singh was a couple of years ago when there was the farce of three Bollywood films on his life being released. Simultaneously.

Well! I guess he was not lucky enough to be born into the Nehru-Gandhi parivar.

That would have helped.

Sachin Endulkar???

Sachin Endulkar

This was the screaming headline on Indiatimes.com (sometime in late January) that we are well seeing the end of Sachin Tendulkar.

And then there was this incidence of Shoaib Akhtar hitting him on the head. The knives came out almost immediately. He is just not the same Sachin. Sixteen years of battle have taken their toll on his body. He cannot make enough runs. The team cannot depend on him anymore to bail them out of trouble. Etc and more etc.

Moin Khan went so far as to say, “the fact of the matter is that Shoaib Akhtar literally exposed Sachin’s present-day ability against quality fast bowling during a spell that will certainly be remembered for long.” Thereby suggesting that Sachin was running scared of Shoaib Akhtar.

Oh! How we like to pull down our idols.

After watching Sachin’s performance on Sunday, in the Third Test versus England at Mumbai, I wondered if the knives would be out all over again. And sure enough they were.

It started with the Mumbai crowd booing Sachin. Sachin, the one time demi-god of Indian cricket. Sachin - The local boy. Totally Unheard of. Come to think of it I haven’t seen Sachin being booed anywhere in the world.
Well! To be fair, Sachin’s innings was not particularly attractive. After all how attractive can a batsman be in a personal score of 1? He did look uncomfortable while he was there, was not connecting well and probably the only shot that he was able to middle was fielded at gully. And, yes, he did look anxious to get off the mark.

And then there was the way he got out. It was very very pedestrian. Poking at a wide-ish delivery outside the off stump without any foot movement at all. A dismissal for which a school boy cricketer would earn a whack on the side of the head.

I took a look at his average for the calendar year 2006 and realised with a shock that it is only 22.2 with a highest of 28!!!

Hmmm… were people right in casting doubts about Sachin the player?

Then there was this comment that if Saurav Ganguly could be dropped in spite of scoring 10,000+ runs in One day internationals then surely Sachin can be dropped too if he so woefully out of form. How can one have two sets of rules?

True True True. I totally agree with most or all of these arguments but then on the basis of one series to say that “Tata” time has come is a bit unfair. And more than anything else an Indian team without Tendulkar seems such a monstrosity.

And, hey! There is the second innings yet to come. Don’t forget that guys. Don’t you forget that.

Are stock markets returns for real?

Authored by Sameer Nair

This is the story of two childhood friends Anju and Manju. Anju was a quant. wizard while Manju was the English literature/History kind of girl. Anju slogged her way to a premier engineering college and then realized that she was more interested in finance. She cracked the CAT and in two years she landed a job in a bank.

Meanwhile Manju had five years of pure fun at Xaviers before starting work at an Ad agency. They met at the school alumni meet in 2001. Manju thought it fit to ask Anju for some tips on investments. Manju had invested all 4 lakhs of her savings in a bank FD at 7 %. Anju was flabbergasted. She wanted to be of help to Manju. “You see given that inflation is at 4 % you are in effect only getting a Real rate of return of 3 %”.

Manju didn’t understand a word but felt too ashamed to ask the meaning of that statement. Anju went on to explain how she had invested a similar sum in the stock market. She expected it be the surest method to beat inflation. In a few years she expected to grow her investments enough to move from her tiny one-bedroom apartment to a larger flat in the same locality. Manju had a more modest goal of upgrading from her Maruti 800 to an Esteem in a few years. At six lakhs she felt it was beyond her.

Cut to 2006. One more reunion. Anju’s stocks had performed brilliantly. She earned a “CAGR” of 24% she told Manju. As usual Manju didn’t understand a word. “So you must have moved into that large flat right” Asked Manju.

“Alas, real estate rates have gone through the roof, that flat is still unaffordable” Anju Said.

Slowly Manju started understanding what “real” returns meant. Car prices had crashed. An affordable bank loan coupled with Bank FD had allowed her buy a Honda City. In real terms she had performed better than Anju who could yet not buy her dream house.

Anju went home feeling jealous. Everything had gone well for her. Seemingly. Yet Manju the financial dud had done much better for herself. Over the next few days she thought of only this and nothing else. To the point where it got unbearable. She decided that she had to go back and speak to her B-School Prof. to figure out what went wrong.

Anju called up Professor Tsunami-nathan to find out more about the “Real Returns” conundrum.

Professor Tsunami-nathan intoned, “While inflation of consumer items like foodgrains, clothes and other items of everyday use has been moderate, capital assets like real estate equity and gold have risen in value substantially.”

“Under such circumstances, is it not silly to hold on to the Real Returns = Nominal Rates minus Consumer price Inflation formula? Especially when consumer price inflation rate does not reflect the huge increase in capital asset price.” asked Anju.

“Its as silly as the statistician who drowned in a river whose average depth was only 4 feet. He believed that being 6 feet tall, he would have no problem crossing the river, till he reached the point where the river was actually 12 feet deep” replied tsunami, with a grin that did not hide his contempt for Anju

“The inflation rate is merely an average. The average, as you are aware can conceal huge variances in the rise in prices of individual components” Tsunami went on.

He never had patience for the student who applied formulae without understanding the underlying assumptions. As corollary, he did not really enjoy discussions with his students, supposedly the intellectual cream of India

“To believe that booming stock markets have made investors as wealthy as these pink papers make us believe is absurd. A person’s wealth increases when he can buy more with what his investments generate for him. In fact the next time the stock market falls by 20%, you may actually become wealthier,” he said.

And Anju being the quick learner was quite clear. “If that flat that I want falls in value by 50% and my stock investments only by 20%, I may in fact be able to buy it.”

She went home and prayed that her dream house becomes affordable. Unlike earlier, when she prayed that her stock investments rise in value. She did not care for the nominal value of her shares any more, she was only interested in what they helped her purchase.

Consensual Sex or was it …. Rape?

The recent Kasliwal episode set off a train of thought in me.

For those who have come in late, 26 year old Abhishek Kasliwal, the scion of the Kasliwal Khandaan, has been accused of the rape of a 52 year old woman. He is alleged to have offered her a lift at 2.30 am, driving her to his Mill compound in Worli instead of Mumbai Central Station, consuming alcohol along with her and then repeatedly raping her.

To make matters worse for him unconfirmed reports state that another lady, this time a call centre employee, has also accused him of raping her on the Mumbai-Pune highway.

In the past 24 hours we have had some other interesting characters joining the act and there have also been some flip flops by the victim, but without going to each one of them, if Kasliwal is indeed guilty of these crimes then he should be punished as severely as possible. Women face enough problems in India without rich, spoilt brats adding to them just because they could not keep their testosterone under control.

Oddly enough, however, my attention and my thought process was not focused on the alleged rape but wandered off in the direction of what the Defence had to say. “It was sex by consent.” That was the argument. Without going into the merits of the case I needed to figure out: when precisely does sex by consent turn into rape? And how exactly do you define consent? Is it given verbally? Is it on the basis of physical cues? Is it based on emotional cues? And what is the window of time, for consent given to be withdrawn?

These questions might sound incongruous in this day and age when crimes against women are getting common place and worse still are going unpunished but, really, how does one define CONSENT.

Let’s say, for argument’s sake that I am bowled over by this lady and decide to make love to her. And for some unfathomable reason believe that the lady in question will have no objection to “doing it” with me.

Not that it is likely to happen. We all know that women are not exactly queuing up outside my house to have sex with me. But then again maybe she is doing it to win a dare. Whatever! She is game.

I invite her to my small yet elegantly! done up flat, put on some romantic music, order dinner, have a sparkling!! witty!!! meaningful!!!! soul-stirring (more!!!!) conversation and by and by she falls under the mesmeric spell cast by me and gets to the point where making love seems the most logical outcome even to her.

In the cold light of the day when I tend to lose my attractiveness, she wakes up, takes one long look at me and decides: Oh! God, what a humungous error. She storms out swearing that she had not bargained for the evening to have gone all the way.

Would this be consensual sex where the lady in question has made an error in judgement? Or would it be rape?

Now I understand an unambiguous NO. I respect that. But seriously, what I want to know is when can a lady say no?

Before the act?
In the run up to the act?
During the act?
After the act?When is it OK for her to complain?

And how do I prove that sex was consensual?

Is there a declaration form that has to be filled in and signed by both parties to prove that I am in the clear? Just a bit confused here.

If the lady says no; but thanks to my incessant pleading, pleading mind you, not threats not physical assault; the lady agrees to what Liv Tyler famously called a “sympathy hump” could she change her mind later? And get me into trouble?

When, even in the throes of passion, the lady sticks with her decision that petting is just how far she is willing to go and no further and that penetrative sex is definitely not on then it is a very clear, very unambiguous message. It is a let down but one accepts it. Like a gentleman. If one did not pay heed to this unambiguous NO and went ahead nevertheless then that is undoubtedly rape.

But if she too goes with the flow of things and then in a gush of remorse decides that she was cajoled/coerced into it then it is grossly unfair.

A big girl should take responsibility for her actions. Not say, “Oh! I did not know that just because he offered me a lift at 2.30 am, drove me to his Mill compound instead of Mumbai Central Station and plied me with alcohol, he had sex on his mind.”

Mind you, I defend a lady’s right to travel at the time of her choosing, will defend her choice of beverages, and will defend, in general, her right to make her lifestyle choices. Defend them to death. But with freedom should also come a degree of awareness of the danger(s) involved.
Am I trivializing the very serious issue of rape and crime against women? I hope to God that this post is not taken in that manner. Because I am not.

Especially not when Navi Mumbai is reeling under violence triggered off by some drunken lunatics who harassed a lady who did not wish to play Holi. Especially not when one reads of minors being raped by their guardians. Especially not when today there is another instance of teen rape reported in the newspapers.

Once again I am not trivializing the issue of rape just that I am trying to look at the other side. After all justice should be impartial should it not?

The Forgotten Mutiny

When one talks about a Mutiny in India one is immediately reminded of the Revolt of 1857 or as it is now called “The First War of Indian Independence”. However another mutiny that took place just before our independence is largely ignored.

This was the Naval Mutiny that started on February 18, 1946 in Bombay.

Like most revolts the Naval Mutiny too had a rather innocuous beginning. About a thousand ratings of HMIS TALWAR, the signal Training ship of the Royal Indian Navy in Bombay went on a hartal and a hunger strike. The incident which precipitated this unusual action was the alleged insult to an Indian rating by a British officer when the rating drew the officer’s attention to some of the problems they were facing.

This hartal was ignored by the Britishers and before they knew it they had a full fledged mutiny on their hands. Moreover unlike earlier this was a mutiny that received unprecedented public support.
That the British chose to ignore this hartal by a 1000 naval ratings was a bit surprising because just twelve days earlier 600 members, including officers of the Royal Indian Air Force (RIAF) camp situated close by on Marine Drive went on a hunger strike as a protest against an insult by the Camp Commander. This hunger strike was supported by the RIAF men at Delhi, Lahore and Karachi forcing the British to take remedial measures.

The strike by the Naval ratings soon took serious proportions. Hundreds of strikers from the sloops, minesweepers and shore establishments in Bombay demonstrated for 2 hours along Hornby Road near VT (now the very busy D.N. Road near CST). British personnel of the Defence forces were singled out for attacks by the strikers who were armed only with hammers, crowbars and hockey sticks. The Union Jack was lowered from the ships and Congress and Muslim League flags were hoisted.

A reign of terror prevailed in Flora Fountain for an hour. Vehicles carrying mail were stopped and the mail burnt. British men and women going in cars and victorias were made to get down and shout “Jai Hind”. Guns were trained on the Taj Mahal hotel, the Yacht Club and other buildings from morning till evening.

Absolute chaos prevailed for the next few days. 2000 men of HMIS AKBAR joined the strike. There was firing on the naval ratings in Castle Barracks. 1000 RIAF men from the Marine Drive and Andheri Camps also joined in sympathy.

The strike soon spread to other parts of India. The ratings in Calcutta, Madras, Karachi and Vizag also went on strike shouting slogans “Strike for Bombay” “Release 11,000 INA prisoners” and “Jai Hind”.

Four days later, on the 22nd February, there was complete break down of law and order in Bombay. There was unprecedented arson and looting.

The most significant factor was that Hindus and Muslims combined to fight the British. And remember this was just before independence at the height of the movement for Pakistan. Even the burhka-clad women of Bhendi Bazaar, which was the worst affected area, joined in the agitation throwing pots and pans, from the roof tops, at the British soldiers who were called out to patrol the streets.

Shockingly this Mutiny in the armed forces got no support from the national leaders and like all mutinies before it was largely leaderless. Mahatma Gandhi, in fact, condemned the riots and the ratings’ mutiny. He said, “A combination between Hindus and Muslims for the purpose of violent actions is unholy and will lead to and would probably be a precursor to mutual violence – bad for India and the world.” Sardar Vallabhbhai Patel, who was in Bombay, appealed to the agitators to give up violence and agreed to intervene only if they did so.

The British Government on the other hand clearly saw the writing on the wall. They realised that if the men of the Defence forces could not be relied upon then their hold on India would be very shaky. Also a hostile Navy would mean that the links with Britain would be severed.

On the 19th February, a day after the naval mutiny broke out, the British Government announced that a Cabinet Mission would come to India to work out details of Independence of the country from foreign rule.

The 60th anniversary of this amazing event passed by last month and not a pip about it either in the mainstream media or elsewhere. This despite the fact that the Naval Mutiny might have had a greater impact on the British than the Revolt of 1857. Sadly yet another instance of ignoring the contributions by our Defence forces.

Lalu has performed, where's his incentive?

Authored by Sameer Nair

I pick up my pink paper and am confronted with the following headlines.

Top line Growth of 18%, Profit Growth of 78 %, Cash Balances at a healthy 6900 crores, improvement in operational efficiencies.

Surely this is one stock that our analyst friends would have given a thumbs up to. And the CEO – he ought to have earned a hefty performance bonus. Running into Crores.

Sadly for this CEO it is not to be. He heads the railway ministry and is widely regarded by the media as this buffoon who, through a mix of caste dynamics and compulsions of coalition politics, has managed to get himself the important railway ministry.

The papers were quick to clarify overtly and otherwise that this performance was completely the result of a buoyant economy. Growth in freight is an obvious by-product. Lets not get carried away. The minister has nothing to do with it. I am sure the analysts are right.

But should not a similar question also be asked of private sector managers?

Surely the quadrupling of the Sensex over the last four years has had a lot to do with the robust revenue growth of Equity Brokerage Houses. A 300 basis point fall in interest rate that happened four years ago made it possible for banks to book huge gains through bond trading. And the bond traders walked away with crores.

My friend who works at the desk in one foreign bank later confessed that it was the kind of a year in which even a monkey put in front of the trading terminal would have found it tough not to make money.

This is certainly not an argument against performance-based pay. Without a doubt, such a system works wonders for the motivation of employees. The point is that one should be careful in defining performance. There has to be a distinction between luck and skill.

Our current definition seems to be that an MBA from a premier institute generally found in an expensive suit and red tie who has "performed", has done so because of skill, while the pyjama-clad, pan chewing minister from Chapra has been merely "lucky" to head the rail ministry in good times.

The Ghost who Stalks

I live in, what used to be a wonderfully quiet and blissful ghost town, Kopar Khairane in Navi Mumbai (for those who have come in late Navi Mumbai is the satellite city of India’s urbs prima – Mumbai.) Kop Town (as I like to call it) unfortunately got transformed when Reliance Infocomm infested the place leading to unnecessary disturbances like people, shops and .... well, civilisation in general. Very distressing. Especially since the beauty of any place in India is marred when people start moving in.

However all is not lost. People might, just might, move out again. The reason? All of Kop Town is on tenterhooks, because there is a three headed ghost stalking the place. Yup three heads no less.

And quite a talented lady if one goes by what my Loony Bin Neighbour X had to say. He huffed and puffed up to my flat the other day and started off immediately.

LBNX: Puff puff pant croak ooosshhhsoso
Me: What?!?!?!?!
LBNX: You heard the latesht?????
Me: No and don’t want to.
LBNX: There is a GHOSHT stalking the area. 3 Heads alsho.
Me: Really!!!
LBNX: Oh! Yesh. Oh! Yesh. It was in the Newshpaper today.
Me: Ok. So?
LBNX: What do you mean sho? There is a Ghosht in our area. Once she identifies a house she changes her face to resemble one of the family members, imitates their voice and then goes into attack mode.
Me: She changes her face? All 3 or just the leading one?
LBNX: (with a dirty look) Why don’t you step out at 2.00 am and find out for yourshelf?
Me: Why 2.00 a.m.?
LBNX: She comes out of her hiding at 2.00 a.m.
Me: She seems to be keeping time with the BPO junta. Come to think of it she would be quite an asset in any BPO organisation. Total Value For Money. 3 heads. One salary.
LBNX: Very funny. You will not feel like joking when she comes to get you.
Me: Why me?
LBNX: You are just the sort of jerk she will want to attack. Besides you have not even inscribed "XXX" or "Shree Ram" on your front door.
Me: I understand the jerk part. But "XXX" and "Shree Ram"?
LBNX: You are shoooo shtupid. Don’t you know, the only way to ward her off is by inscribing these on your front door? Everyone has done it. Even Muslim families.
Me: Wow! I always knew we Kop Town wallahs were very secular.
LBNX: Yeah! Yeah! But write them on your front door.
Me: Ok. Ok. But how I wish I was a school boy now.
LBNX: What??? Why?
Me: Imagine the chaos I could create in school. The pompous teachers I could have troubled.
LBNX: How can you talk about your teachersh like that?
Me: Why not?
LBNX: Don’t you also teach in some Management colleges. What if your shtudents think you are a pompous chap?
Me: My students don’t think. They know. I make sure of that.
LBNX: Very funny. But anyway you have been beaten here too. The Terna School was having its Annual Day the day before and shuddenly someone shtarted shouting “Chudail, chudail” (Ghost Ghost) There was almost a stampede there.
Me: Hehhehehe hahahh hehehe
LBNX: Disgusting. How can you laugh at something so sherious?
Me: No. But can’t you empathise with the kids there? Some boring chief guest might have been going on and on about some nonsense and this bright young kid must have thought, “Let me liven up the situation”. And he sure did.
LBNX: He did nothing of that sort. The Annual Day programme was wound up after this incident.
Me: HHEHEHEHEHE HAHAHAHAHAH HEHEHEHE.
LBNX: Anyway enough of your nonshense. All of us young men are patrolling the streets in groups so that whenever the Ghosht comes here we can defend ourselves. Want to come?
Me: Huh? Hmmm. Well.
LBNX: Tcah I always knew you were a coward.
Me: No no. It is nothing of that sort. I do want to meet 3HG
LBNX: 3HG? Who ish that?
Me: Your darling 3 headed Ghost.
LBNX: Oh! You are such a pain in the assh. Here I’ve come to help you and…I hope she takes you away.
Me: Ok. But remember I know where you live. I’ll tell her that.
LBNX: @#!%$^& ¿Ж¿Ж^>^ *&##!^!^!
Me: Right back at you.

And that ended my exposure to this Three headed Ghost. I have been told this story has also featured on some news channels. (I haven’t seen those programmes but I am sure they might have been). Thankfully the saga of the Three headed Ghost continues. It has livened up my life for a few days. What more can one ask for?

By the way the tagline of Navi Mumbai is: The city of the 21st Century. Some irony that.

Greg Chappell: Retirement after the 2007 World Cup?

So Greggie has finally admitted it. It was Saurav Ganguly who got him the coveted job of Coach of the Indian cricket team. In fact he says, “Certainly there is no way I would have got the job here without his influence.” He also says that he did not realize, at that stage, how important the captaincy was for Ganguly’s life and finances.

I get the naughty feeling that the moment Greg realised it he had Ganguly removed.

Maybe it did not happen that way but if I was a potential employer I would be very wary of Greg.

Why?

Simply because if I did appoint him or be instrumental in his appointment I would probably be on my way out very soon. :-)

Which brings us to the question: Who is going to employ Greg after 2007 when his contract with the BCCI expires?

Visa Power

Alas! I have but a second hand knowledge of the rudeness and impoliteness of American Consular Officers, never having met them, either professionally or personally. However, I have heard horror stories of the arrogance they exhibit in India.

And now one hears that the Indian scientific establishment is livid over the visa issue of senior scientist Dr. Goverdhan Mehta. The Indian scientific community is fuming over the impolite questions that they are asked and so on and so forth.

I can quite appreciate the anger and indignation welling up inside these senior scientists after having gone through an inquisition by these modern day nabobs. Nabobs who would probably have emanated from some marshy boondocks in the US of A and now consider it their duty to be rude towards the "natives".

The anger one feels is obviously justified.

But, But and it is a significant But, it is their blasted country.

And they have every right to either allow us into it or not.

Moreover I feel so long as we line up outside American consular offices in India in our hundreds the Americans will continue to be cocky and arrogant. Does the Mongolian Consular official behave so rudely? Not that I know of. And that is simply because not too many of us are waiting outside his doorstep, spreading newspapers and spending the night on the footpath in a disciplined line, waiting for an appointment at 1.00 pm the following day.

Dr. Mehta called his Visa interview process, "the most degrading experience of my life." Now that the US consulate has given him the visa and the American ambassador has apologized, the good doctor seems assuaged. He however has made it quite clear that he will not visit the US. For Now.

Eh? What was that?

Dr. Mehta has made it very clear that he will not attend this assignment. Of course he also said, "I am not saying I will never go to that country. I might, if I am given an invitation and visa."

Good God!!!

Just when I thought that someone was taking a dignified stance.

So inspite of the outrage I feel at the despicable behaviour of the consular staff I would much rather train my ammunition on our venerable scientists.

Why do they want to go to the US?

For shopping?

To make money?

To take part in conferences and read papers?

To carry out research?

If it is for the first two reasons, sorry guys but then if that is the case you just have got to lump their bad behaviour.

If it is for exchange of information, augmenting your knowledge etc. great, one appreciates the effort but have you guys not heard of the Internet? Email? Video Conferencing? These are tools that can be used to keep in touch with the scientific community overseas without having to set foot in any miserable American consular office.

Or has the Net revolution so completely bypassed you folks that you are not even aware of these basic things? Or am I being too naïve in assuming that exchange of scientific ideas can be done via the Internet?

A couple of centuries ago when the US of A was still a nascent country and the Americans were all in awe of Europe, the American poet philosopher Emerson lamented, " Can we not extract this tape-worm of Europe from the brain of our countrymen?"

They finally did extract the tapeworm. And how did they do that? Simply by becoming the most powerful country in the world. That is how we need to tackle the issue too.

At the risk of sounding didactic the only way we will gain respect in the world is when India becomes powerful, economically and militarily. We will not gain respect if we continue to play the role of a supplicant.

But are our scientists listening? Or are they busy planning their next trip to the US?

What say Dr. Mehta?

Investment Advice or Gobbledygook

Over the years the one point that I have heard finance ministers across party lines make is “Investing in equity markets is a risky proposition. Investors who do not have the requisite expertise are advised to leave it to the experts. If you want to participate in the India growth story you would be much better off using mutual funds to do so….”

Fair enough. Coming from ministers with such impeccable educational backgrounds I thought it sensible to take their advice. I promptly signed up for this newsletter that sent me research reports on the prospects of different companies.

I must say the reports were very impressive. Industry analysis. Comparative analysis of various players in the industry. Ratio analysis. The reports had it all. And what’s more, they also gave me a clear idea as to what I should do in the form of a “Buy” or “Sell” advice.

I few weeks later I was completely confused. At the end of a rather comprehensive analysis of a software company “A” they put a “Hold” advice on the stock. I read further to figure out what this exactly meant

“By this recommendation of HOLD, what we mean is that existing shareholders would be better off holding onto the stock with a long-term perspective. However, if an investor would like to BUY this stock, then the upside from the current levels is about 14% CAGR. Investors could take the investment decision based on this premise.”
“Hang On”, I tell myself. “What are they really saying?”

Are they telling me that my decision to own the stock tomorrow depends on whether I own it today or not. That was definitely contrary to what my B-School management accounting professor told me. Remember, sunk costs and all that.

In essence what they were telling me is that if I already own company “A”, I should be happy with an annualised return of 14 %. However if I don’t own it, I can buy into a company “B”, (which they recommended last week) and expect an annualised return of 25%!!!

And this is in a tax regime where the costs of shifting from Stock A to Stock B are negligible for a long- term investor.

I decide to research this further. I search through their archives and come across a report on Company “A” published more than a year back. I notice that they had recommended a buy on the company in that report.

An interesting consequence of all this is that an investor owns a stock because they suggested that he buys it, and now that he owns it they suggest he continues holding it. Despite the fact that in their opinion he would make higher returns going forward if he instead owns stock B.!!! A person who subscribed to the newsletter last week would outperform a subscriber who took their advice on company A last year.

And all this is when they are RIGHT with the predictions on stock performance. God save us in the rare event that they go wrong.

Authored by Sameer Nair

The Mutual Fund merry go round

Which MF scheme should you invest in?

a) A Fund launched five years ago at Rs. 10 that has a NAV of Rs. 50 or
b) A New offering from the same fund at an entry price of Rs.10

To make your decision more “informed” assume that the new scheme will have the same investment pattern as the existing one, albeit packaged under a new name keeping with the latest flavour of the stock market.

In fact a “rational” investor should be totally indifferent between the two. The current NAV of the scheme is totally irrelevant!! If two funds have the same investment portfolio their performance will be no different.

Going by the enthusiastic responses to New Fund Offers (NFO) of various funds it seems that a large number of people believe otherwise. In fact a quick glance of the portfolios of some well known funds will tell you that they have multiple funds launched at different times, that have largely invested in the same set of companies.

Many mutual fund analysts have noted that despite the large funds garnered by New Fund Offerings the total amount invested in mutual funds has not increased significantly.

Clearly a number of investors are actually selling their investments in the fund quoting at a Rs 50 NAV to invest in the new fund offering at Rs. 10 because they believe the new fund is cheaper and therefore has more upside potential!!!

Who benefits?

The fund - because it is allowed to recover the marketing expenses from a new offering to the extent of 6% of the initial moneys garnered. To make matters worse this money is recovered over a five- year period effectively benefiting those who exit early and penalize those who stay with the fund.

Mutual Fund Distributors (in many cases banks) who make huge commissions by selling mutual funds.

The savvy large investor who “shares” the commission with his Agent

Who loses?

The poor retail “long term” investor who has not only incurred transaction costs for nothing, but has also effectively subsidized the Mutual Fund’s marketing expenses.

To put it bluntly this is nothing but a scam. Exploiting human irrationality and lack of appreciation of basic financial concepts amongst the masses to enrich themselves cannot be called anything else.

Authored by Sameer Nair

India V/s China: The Google Test

Over the past few years there has been a lot of discussion on the India v/s China story. I was following the same on and off in my own desultory fashion and trying to figure out which country was more economically important to MNCs. No particular reason, just idle thoughts of an idle mind. Unfortunately I found it rather confusing.

Why? Well, look at the usual suspects discussed, FDI and Infrastructure.

Some claim that the FDI figures that China releases is highly puffed up and that India on the other hand under reports its FDI as it does not take into account the reinvestment of capital and overseas corporate borrowings as is the normal practice. Therefore the FDI gap is much closer than one feels. Then again there are those who compare India's FDI inflows very unfavourably with the Chinese FDI based on actual numbers.

The state of infrastructure in both the countries obviously has to crop up. And people always always start with the airports. The squalor of Mumbai pitted against the spanking new Pudong airport at Shanghai. While China is indeed far ahead in terms of physical infrastructure, of late MNCs have begun to talk in glowing terms of India's "soft" infrastructure i.e. a free press, an independent judiciary and our democratic institutions - such as they are!!!

So as I said in the beginning it has been a slightly confusing time for me. Which do MNCs prefer? India or China?

Now I know.

China China China and China once again.

Why so?

Well look at the reaction of dear old Google – the world leader in search and a very important player in the Internet arena – to the "requests" of Chinese authorities to censor their search results. It has voluntarily decided to censor search results on topics such as " Independence for Taiwan" and the "Tiananmen Square massacre" among other things.

And as justification for this despicable conduct Google has come out with a totally self serving crap which read as, "While removing search results is inconsistent with Google's mission, providing no information... is more inconsistent with our mission." Ooo la la.

Now look at the reaction of Google to concerns of the Indian Government over Google Maps, "Google takes governmental concerns about Google Earth and Google Maps very seriously. Google welcomes dialogue with governments, and we will be happy to talk to Indian authorities about any concerns they may have."

That is it. Nothing beyond this bromide dished out by the company spokesperson. I wonder if they would have been so blase if it was the Chinese Government that wanted some change.

This difference in reaction says it all does it not?

China wins hands down.

(Ir)Rationality and Corporate Madness

The only course that I managed to get an A grade in my illustrious career at B-School was Cost and Management accounting.

And here I am in the danger of losing my annual performance incentive. My sin? I have been vehemently arguing in favour of putting into practice something I learnt in Cost and Management accounting.

Serves me right for deviating from my general philosophy of not taking academics too seriously. I sometimes wonder if performance at work and grades at an MBA are negatively correlated. But more of that later.

In my years spent in the corporate world (and in life in general) one of the concepts I have found most appealing and yet the one concept that I find most difficult to put into practice is the notion of sunk costs.

Very broadly, while evaluating the pros and cons or more mathematically the costs and benefits of a decision I should only consider future costs and benefits. Costs that have already been incurred and benefits already reaped should not enter the equation at all. It will unnecessarily cloud my decisions.

Intuitively the most rational of us make this mistake. I make this mistake often, but am puzzled that on a few occasions that I don’t; my bosses in fact mock me.

Some common examples are

1) Let’s say there are two stocks that I own,
a) I own 1 Share in Company A, Purchase price = 50, Current Market Price = 75
b) I Own 1 share in Company B, Purchase price = 100,Current Market Price = 75

If I need 75 urgently and I want to sell only one of these then which one should I sell?

Similarly

1) Total Revenues from Project A = $ 10 Million, Costs = $ 8 Million, Should I fight a battle with my customer to make an additional 1 million in revenues in the process incurring a cost of 3/4 a million?
2) Total Revenues from the same Project A = $ 8 million, costs = $ 10 million, should I fight a battle to make an additional 1 million in revenues incurring a cost of 3/4 a million?


The key to making the correct decision, I was told by my professor back in B-School, is to ensure that we only take into account future costs and benefits. One million in additional revenue vs. three fourth of a million in costs.

Put simply our decision to go ahead and contest the case or not should not be clouded by the costs already incurred.

I can bet my bottom dollar that all the bosses in the 10 companies I worked for will be more inclined to say “No” in case 1 and “Yes” in case 2

They would have certainly flunked Cost and Management accounting. But does it really matter? They decide my annual performance incentive, rationality be damned.

Authored by Sameer Nair

Adventure at Midnight

I just have to share this adventure at midnight that I had recently. It was an out and out “Famous Five” kind of stuff. Or as a friend pointed out, “At least make it Hardy boys, sounds less childish.” Anyway Famous Five/Secret Seven/Hardy Boys/Shikari Shambhu whatever, an adventure is an adventure.

Here it goes.

Dark was the night and all was still save the ………….oh! What the hell. I have no clue. I was fast asleep. And past midnight into my sleep numbed brain floated the persistent, irritating ring of my blasted cell phone. I reached my hand out and was about to be rather curt with the caller when a man’s soft whisper came through.

Now I am not accustomed to receiving calls at midnight. I am definitely not accustomed to men cooing to me softly at midnight (or at any other time I might add).

But my mild state of confusion changed when I could hear the caller. “Gautam” it said, “I am X from Flat 101. There is a gang of robbers on my terrace and my family and I have locked ourselves up in one of the rooms. What do you think we should do? What can you do?”

When I heard those words I, for a person of my age and fitness level, acted with reckless courage. And displaying acrobatic skills I did not know I possessed was under the bed in a jiffy. I do not know what the existing world record for getting under a bed from on it is but I am sure I lowered it a few notches.

I also shut off all lines of communication. Lest there be another telephone call.

Problems however persisted. My trip under the bed turned out to be a congregation/communion with an assortment of old newspapers, used envelopes, dust balls, a sock, an apple core and other such items necessarily found (according to the latest Municipal rules) underneath beds in a bachelor pad.

Prompted by this and to a smaller extent by the fact that there already appeared to be a smallish, noisy crowd of do-gooders who had assembled to rescue the Xs, I got out from under the bed and after securely locking my flat walked down.

As I walked down I saw that the junta was clustered around the main door which was to be opened by X. As we heard X’s footsteps quite a few of us, with an ill assumed ease, tried to melt into the background or at the very least behind one's fellow rescuer.

The door opened and we all burst into the house.

Meaning, the most daring of us peeped into the house and then tip toed in. With the knowledge by and by that no one was around we decided to calm the nerves of the children and a wide eyed Mrs. X.

P.G. Wodehouse had once famously remarked that milkmen as a species are the least marrying sort as they see women too early in the morning. I am now convinced that brave rescuers, like all of us, who see women at midnight don’t fare much better. Anyway I digress.

All of us then assembled on their terrace and speculated on the route taken by the desperadoes to escape.

At this critical juncture appeared good old S, their neighbour who was clearly surprised by the commotion. When told of the reason he was even more surprised. Pointing out that he was on his terrace not 10 minutes ago removing clothes off his clothes line. I was beginning to put 2 and 2 together but decided to ignore the old man.

After a few minutes all of us dutifully trooped out.

When I reached home I peeped out of my window and found the Ss and the Xs exchanging a few embarrassed laughs.

The reason.

A recent rather novel idea of the Navi Mumbai Municipal Corporation to install street lights had meant that when dear Mr. S was picking his clothes off the clothes line (at midnight, I might point out) he had perforce to walk up and down the side of his terrace. As a result of this, the shadows created by the street lights fell on the Xs window and made them feel that there was this huge gang out loose on their terrace.

Ah! Well. I had a good laugh too. But talk of bad timing. I came to know of the Mr. S angle barely minutes after I had breathlessly SMSed a friend telling her of my “heroics” and promising to reveal all when we met. Tch tch.

That's the way the cookie crumbles.

Don’t Tax my Salary, Mr. FM

Its that time of the year again!!! A whole host of industry associations, tax-experts, finance managers and their aunts have crawled out of the woodwork once again with their wish lists for the finance minister.

Cut excise duties on cars – It would be a great employment generator.
Cut Tax Rates, Tax Collections will rise? Laffer, the famous economist dude said so.
Do not raise taxes on essential commodities; we are already overburdened with an increase in Oil prices.
Blah blah blaaah and some more blah.

I am a simple man with a very simple wish.

Out with taxes on Salary.

Do I hear “Yeah right, might as well ask Aishwarya Rai out”?

Well I think it is not as crazy an idea as it sounds at first. This could actually be a Win-Win situation. Unlike my date with Aishwarya, I might add. :-)

What if we replace Income tax on salaries with a “Salary Distribution Tax”?

The way it would work would be by shifting the burden of paying the tax entirely on to the Employer in the form of a tax on the wage payout. Say a 10% Tax on the total wage bill of the employer.

The idea is to make the whole process simpler for the employee while ensuring the exchequer does not lose out.

For the employee the immediate benefit is WYSIYG. His take home salary converges to the salary mentioned in the employment letter. (Of course the salary mentioned in the employment letter would now be more realistic, read a bit less than before.) No need to run to the CA to file tax returns. No medical bills to be “arranged” for, no rent receipts to be forged, no Form 16s to be obtained. The tax authorities do not have to deal with the mountains of returns that they do every year.

Moreover the employee feels deliriously happy under the mistaken belief that there is no tax to be paid at all.

Can the tax authorities do it? Sure they can. After all they have done the same with dividends, when all that the government did was to shift the burden on to the company in the form of a dividend distribution tax. The result of this distribution tax was lower dividend for the shareholders (to the extent of the tax). But who looks so deep?

With this one stroke of the bureaucratic pen the then BJP government convinced a large number of retail investors that dividends distributed by companies are tax-free. Retail investors “felt good” that they no longer had to pay a tax on dividends.

Why not make the salaried employees “feel good” in the same manner, this budget?

Authored by Sameer Nair

Sania Mirza & her Padmashri

As a rule I believe that Indian cricketers are an overpaid, over-recognised bunch and that other sportspersons should be given due recognition from the public, the corporates and especially the government.

However I find myself cold to the idea of the Padmashri award for Sania Mirza. I believe the Padma award is too much too soon.

Sure she has done what no other Indian woman tennis player has. Yes, she has had a fantabulous year in 2005. And there is no denying that she has captured the imagination of the nation like no other sportsperson has ever done before (excepting possibly a 16 yr old Sachin Tendulkar).

But if one were to take a hard look at the facts what would they reveal? A ranking of 34 on the WTA. (she was ranked No.32 last week) and some endorsement contracts from corporate India.

Surely a ranking of 34 on the WTA is nothing to crow about. I also get the sneaking suspicion that all the endorsement contracts that she finds coming her way are not due only to her sporting prowess but also for the visual appeal that she holds for the sexually repressed Indian male.

Sania’s only good year was 2005 and of course the last few months of 2004. She lost in the second round at the Australian Open 2006 and has done nothing of note as yet in 2006.

I am not saying that she does not deserve the accolades and endorsement deals coming her way but recognition of this kind from the Government is a bit too premature. Just to provide a perspective on how quickly Sania has been awarded a Padmashri by the Government; Sachin Tendulkar, a virtual demi-god in India was awarded the same in 1999. A good ten years into his career. By that time he had established himself as one of the all time greats of the sport. Has Sania Mirza done that?

And how do we know whether she would perform even as well as she has done up until now in the future? Can she keep up the momentum of 2005? It would have been much better to have waited a couple of years before awarding her the Padmashri.

The Sodexho Story

I am motivated to write this piece in response to a comment on the post “Lunch Coupons, Warren Buffett & the Pot of Gold”. The gist of the comment was Lunch Coupons are merely a tax saving device so how does it matter if I “lend” some money to Sodexho at 0%.

Sure. But why not allow the same money as a tax-free allowance.

A company wants to provide food to its employees and instead of getting into the messy business of having a full-fledged cafeteria simply pays the employee an allowance.
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In comes the taxman to complicate matters. He insists that the company should ensure that the money is indeed spent on food. What does the company do? It approaches Sodexho to buy vouchers that can be redeemed only against food. It is a completely different matter that my resourceful kiranawala has put up a poster saying that he will accept Sodexho Lunch Coupons for non-food items as well, but will charge 3% extra for that privilege!!!!!

My point is that these food vouchers have no raison d'être.

The government allows Rs. 800 a month as conveyance allowance without asking the company to issue travel vouchers. Then why make the distinction for food?

As long as the person spends Rs.1500 on food sometime during the course of the month it does not matter what he uses to pay in any specific transaction. So long as the tax authorities are certain that a person spends Rs.1500 a month on food items why have these silly passes.

By insisting on Food Vouchers the govt. has inadvertently allowed a multinational to issue “Currency”. Also any company accepting deposits from the public at large is regulated by the RBI. Wonder if Sodexho’s books are open to such scrutiny.

Authored by Sameer Nair

Lunch Coupons, Warren Buffett & the Pot of Gold

All of us working in the so called “New Economy Companies” are quite familiar with Lunch Coupons that companies like Sodexho issue. Our employers’ issue these coupons as part of our “CTC” (that interesting invention of HR which makes us believe, erroneously, that we are earning more than what our parents did) and we go home without a second thought about them.

But have we ever wondered how all this works for Sodexho and others of its ilk?

Let’s make the extreme assumption that all the money that we receive in the form of vouchers is spent within 3 days of our receiving it from the employers. One can easily assume that the employers themselves had kept in their custody for three days at the very least. The retailer in turn presents it to Sodexho a day after the receipt for redemption. The money has thus earned zero interest for 1 week.
Typically Sodexho issues coupons against funds received while they pay the retailers only thirty days after receiving the coupons. Effectively Sodexho has paid 0% Interest for one month. And Next Month the cycle starts again!!

Essentially at all times Sodexho has one month’s equivalent of lunch reimbursement on which it pays no interest. Out of an estimated 1 million employees in the IT and ITES space if we assume that 10% are issued coupons worth Rs. 2000 a month then at the very minimum the industry is lending Sodexho Rs. 20 cr. at 0%. Not a bad deal at all. What say?

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And the moment we change our assumption from “immediate use” to an average of “15 days to use” the effective money lent changes to Rs. 30 cr. at 0%.

An elementary knowledge of finance tells us that if one borrows at say 6% and lends at 8% one makes money. If we borrow relatively large amount of money at 6% and lend it at 8% we make large amounts of money.

Simple enough is it not? Banks across the world work on this basic principle.

The flip side is if for some reason we borrow at 6 % and are able to eventually lend only at say 5% we end up losing a lot of money. Financial experts call this the Power of Leverage. Leverage magnifies both profits and losses many times over.

Here we have a Sodexho that “borrows” money from us at 0% and we do not even think of how the process is benefiting them. If I were to ask you guys to lend me money at 0% interest you would think I am completely crazy. Why would any individual in his senses want to park money with me for no returns? But for a Sodexho you are game, aren’t you?

One rule of making pots of money that Financial Experts on channels like CNBC forget to tell us is that one must try to borrow money for as long as possible preferably at 0% interest. And after a few years one is likely to be stinking rich.

Much like a famous gentleman who goes by the sobriquet, “The Oracle of Omaha”.

Warren Buffett at the beginning of his career controlled a company called Blue Chip Stamps that had an estimated 100 million dollars of money on account of vouchers issued. Some of the companies that he acquired in the early years were through these moneys.

While it is always difficult to estimate, surely a lot of the spectacular returns that he made were because of the zero cost funds he had at his disposal.

Most of us know that he is considered to be amongst the greatest investors around. No one would argue that he was not.

However very few would know that he was also amongst the best in identifying and using low cost capital, a point that is equally important but is seldom discussed with the seriousness that it deserves.

Maybe this is so because if aam junta like us sees that all that he achieved was possible only because he was shrewd enough to see and acquire a cheap source of funds he will look less like an Oracle that he is proclaimed to be. Probably this is why “Magicians never tell”.

A glance at the operations of the Oracle and Sodexho shows remarkable similarities and is obviously the road to riches. Now if only I could get onto this gravy train.

Authored by Sameer Nair

Tag Line for Mumbai

The organizers of the Mumbai Festival 2006 are looking for a Tagline for Mumbai. After all, London has it, New York has it and so on.

Well! I have one for them:
The Spit Capital of the World.

How does that sound? Gross probably but quite close to the truth, ain't it?